The “Costs of Doing Business Abroad” in a Cross-border Context Characterised by Extreme Political Volatility

Torbjørn Bjorvatn*, Trond Randøy

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

77 Downloads (Pure)

Abstract

Purpose
The purpose of this study is to describe and explain the organisation design antecedents of coordination, learning and trust in an international strategic alliance in a cross-border context characterised by extreme political volatility.

Design/methodology/approach
The research was carried out as a single-case study in situ in a humanitarian international strategic alliance in Pyongyang, the Democratic People’s Republic of Korea (North Korea).

Findings
In addition to explaining the effects of interface, specialisation, formalisation and centralisation on coordination, learning and trust, the study demonstrates the influence of classic international business (IB) “costs of doing business abroad” (Hymer, 1960/1976) on the same organisational outcomes. Moreover, the study identifies intergovernmental engagement/containment/disengagement as a contextual antecedent of both organisation design and outcomes.
Originality/value
The study extends IB theory by indicating that mainstream IB perspectives may not fully explain intraorganisational outcomes in cross-border contexts characterised by extreme political volatility. Notably, the study suggests that complementary constructs such as intergovernmental engagement are needed to account for the additional costs incurred by such settings.
Original languageEnglish
JournalReview of International Business and Strategy
Volume33
Issue number5
Pages (from-to)855-868
Number of pages14
ISSN2059-6014
DOIs
Publication statusPublished - 2023

Bibliographical note

Published online: 6 December 2022.

Keywords

  • Democratic People's Republic of Korea
  • DPRK
  • North Korea
  • Costs of doing business abroad

Cite this